News

The New Jersey
Department of Gaming Enforcement has issued an advisory bulletin stating that
any companies operating in black markets will be banned from the state.

Director David
Rebuck’s note attempts to clarify the regulator’s approach to black and grey
markets.

“The Division will
examine whether or not a jurisdiction has a law that specifically prohibits
internet gaming and, if so, whether the jurisdiction has taken affirmative,
concrete action to enforce that law,” wrote Rebuck.

The bulletin was a
result of the DGE’s struggle with how to determine the suitability of a
licensee when internet gaming companies operate in jurisdictions, where the
legality of online gaming is unclear or inconsistent.

“If you operate in a
grey market jurisdiction where internet gaming laws are ambiguous - or no
affirmative enforcement actions have been taken – you’re probably good to go
where NJ licensure is concerned,” commented Ifrah Law gaming lawyer George
Calhoun. “But if you operate in a jurisdiction where the relevant authorities
have taken affirmative action to prevent internet gaming activity, it will be
considered a black market and you may be ineligible for a New Jersey license.
Make sure you know what a black market is and stay out!”

Director Rebuck
recognized the DGE is in no position to pass judgement on the laws of grey
market jurisdictions and therefore opted not to adopt a standard that would
have imposed his own views on the laws or actions (or inaction) of other
sovereign jurisdictions.

“For practical
purposes, this means that New Jersey has adopted a suitability standard of ‘if
it’s not prohibited there, you are permitted here’,” continued Calhoun.

With regard to black
markets, the DGE listed civil and criminal complaints and the issuance of
formal cease and desist letters as examples of affirmative, concrete actions
taken that illustrate that internet gambling is illegal. Where a jurisdiction
has refrained from taking any affirmative steps to prevent an internet gaming
market to develop, the DGE will consider that jurisdiction to be a grey market.

However, Calhoun
believes the bulletin leaves substantial ambiguity concerning the area of daily
fantasy sports (DFS).